Our co-founder Lindsay Fisher recently shared her thoughts on the future of retail and how technology will transform the high street with eTail Europe. Read on to find out why, when it comes to retail transformation, the team at Sparkbox is more excited about technologies in the “dataverse” than the metaverse.
The pandemic fundamentally changed how we think about and prioritise things in all aspects of our lives, including how we shop. During the pandemic, we watched as outdated high street giants like Topshop fell to online monoliths (ASOS purchased Topshop and Miss Selfridge in a £330m deal back in Feb 2021) after 2020’s lockdowns shifted demand online.
Even before the pandemic, the growth of online channels had a major effect on the high street. To lure customers back to physical spaces, some retailers doubled down on ‘experiential’ retail: Selfridges, for example, gave over major Oxford Street store space to a cinema in November 2019.
The Cinema at Selfridges.
Image source: https://uk.fashionnetwork.com/news/Selfridges-oxford-street-opens-permanent-cinema,1160885.html
Post-covid, the ‘experiential’ retail shift is happening online too: brands like Nike and Forever21 are building empires in the metaverse , while others are looking at cross-platform experiences that link influencers with in-store experiences and actual purchasing behaviour. Cross-platform synchronicity is already common in other countries, like in China where ‘Lipstick King’ Li Jiaqi, for example, has acquired more than 170 million followers across various live streaming platforms and once sold more than 15,000 lipsticks in just five minutes.
Pandemic aside, new technologies are enabling new business models and it’s interesting to examine which will last: exciting concepts in the metaverse, web3, and NFTs might still be fantastical for retailers in the UK, many of whom still struggle with warehousing even basic trading data.
Meanwhile, Buy Now Pay Later technology once paved a path to customer acquisition and increased average order value but has recently come under scrutiny and the threat of regulation. Rental schemes and circular models (consumer to consumer resale) provide hope for a more sustainable future of fashion but, including the impact of shipping and dry cleaning, it’s unclear that these models are truly sustainable. Businesses like The Handbag Clinic that focus on restoring our favourite items might strike the right balance in the re-wear revolution.
Ben and Charlotte Staerck, co-founders of the Handbag Clinic.
Image source: https://www.thetimes.co.uk/article/handbag-clinic-saviours-of-the-old-bags-9p2sjxkrn
By contrast Marketplace models are a high priority for many of Sparkbox’s clients, and an area we see growing quickly in the coming years. Third party partnerships between brands and platforms like Next, ASOS and The Very Group enable customers to discover and experience brands in their channel of choice. They also provide retailers with practical new opportunities to optimise assortments, reach new customers and clear stock more profitably.
Another factor influencing the technologies shaping our high street is consumer trust. ‘Generation TikTok’ has an increasing expectation of brand authenticity. To capture real value, online marketing must be backed by truthful claims and quality products. This push has even reached legislative levels, with the UK government currently looking at cracking down on fake reviews. Businesses who incentivise positive reviews could soon be fined up to 10% of their global turnover.
Brands that get authenticity right are able to build not only huge followings, but "fans" rather than "customers." This in turn cultivates brand loyalty, and big business. Companies like sustainable dungarees brand Lucy and Yak have grown quickly through building supportive online communities; meanwhile celebrity founded brands like Rihanna’s “Savage x Fenty” line or Kim Kardashian’s "Skims" regularly use TikTok or Instagram ‘reviews’ to boost new launches.
At Sparkbox we believe the technologies with the most potential to transform the high street are those in the “dataverse”, not the metaverse. Following a period of unpredictable trading during the pandemic, retailers and brands are prioritising cleaning up their data stacks to enable better use of data.
Decision intelligence for merchandising and supply chain processes is transforming the high street by helping retailers leverage their data to buy the right stock and make it available in right place, and at the right price.
Developments in integrating machine learning- based tech has made decision intelligence technology surprisingly quick and practical to implement, which means these projects can be quick wins and benefits-led. One of Sparkbox’s clients implemented our pricing optimisation solution to improve margin by 34% in just 34 days. Two years on, they continue to deploy Sparkbox’s demand forecasts in new and exciting ways across their business.
From the "dataverse" to the metaverse, many exciting technologies will transform the way we shop on the high street (and online) in the next 10 years. At Sparkbox we believe the most exciting changes might come from the most practical solutions; those that help increasingly busy merchandising and operations teams make data-driven decisions easily.
At Sparkbox we help busy merchandising teams make data-driven decisions quickly and confidently. We use machine learning to forecast demand, optimise pricing and channel allocations and recommend rebuy opportunities. Learn more about us here or get in touch!